403b Plans for Massachusetts Teachers

​Public school educators, including university professors and administrators, can save more pre-tax than any other public or private-sector employee.

That’s because educators are eligible for two retirement plans, both with unique catch-up options.

In 2020, educators can save $19,500 into a 403(b) and a 457 plan. Those 50 years of age or older can also contribute an additional $6,500 into one of the two programs.

Not-for-Profits Financial Advisor

403b Catch-Up

The 403(b) catch-up allows educators with low 403(b) savings who have worked 15 years with the same employer to save an additional $3,000 per year for five years.

One problem with this catch-up is that any contributions over $19,500 are credited first against the 15-year rule, so a teacher aged 50 or older could use up their 15-year catch-up without knowing it.

Getting Ready to Retire

457 Catch-Up

The 457 plan has a more considerable catch-up. It allows eligible employees to contribute $37,000 per year for three years before their “regular retirement date.”

The 403(b) catch-up can be used in conjunction with the age of 50 catch-up and a 457 plan. However, the 457 plan catch-up cannot be used with the age of 50 catch-up, although the employee could still contribute to a 403(b).

Not everyone can afford to save the maximum; however, it is good to know that educators have a well-deserved potential benefit.

Your school system provides you with a list of 403(b) companies. The 457 plan is different. The city/town usually provides one company. Both typically give you a broad range of investment options.

Student Loans Private or Government Sponsored

Sign Up Today For a 403(b) Plan and Start Paying Fewer Taxes Tomorrow

Since 1990, I’ve been a financial advisor specializing in helping educators set up, invest in, and service their 403(b) plans.

I have accumulated a reservoir of knowledge on the retirement system, the social security offset/windfall elimination, 403(b) plans, and other financial issues specific to public employees.

Social Security When Should You Start Taking It

Because I am an independent financial advisor who provides flexible payment options (fee-only, hourly rate, or commission), I can work with most companies in your school system’s 403(b) plan. A partial list of companies I work with includes Fidelity, American Funds, Putnam, MFS, Aspire, Security Benefit, Axa, and Oppenheimer.

We consider the choices available to you in your 403b or 457 plan for educators and other public employees. I recommend one or two of them, and then I build and monitor your portfolio.

These are the opinions of Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only and should not be construed or acted upon as individualized investment advice. 

“PLEASE NOTE: The information being provided is strictly as a courtesy. When you access this link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.”